GB00_erste lage_E - Erste Group

Positive trend in
International Business
International Business
Large non-Austrian corporates, banks and governments are served by the International Business
unit in Vienna and the branches in London, New York and Hong Kong. Among other lines of business,
these foreign branches specialise in trade and project finance as well as investment in
asset-backed securities.
The international economic environment was characterised by the business cycle reaching its
peak by mid-year in 2000. The high level of the oil price caused interest rates to rise in the US
and in Europe and put a damper on growth. In the US, economic activity slowed down markedly,
albeit developments differ from sector to sector. Meanwhile, the record US current account deficit
continued to shore up robust economic growth in Europe. The emerging markets economies
did well with few exceptions.
The robust performance of the International Business unit in Vienna was fuelled by a focus
on select products and customers, notably lending to sovereign borrowers and banks as well as
international corporate and project finance.
The lending volume expanded by a relatively moderate rate of 8% or EUR 363 million to EUR 4.8
billion. The focus was on interbank financing, whereas expansion was below average in corporate
and project financing in the areas of telecommunications, energy and public as well as private
sector utilities.
In line with the Group strategy, focal points were defined in different countries in Central
Europe.
International branches
The profit centre London, beside acquisition finance, specialises in aircraft finance and securitised
financing through mortgage-backed and asset-backed securities. At this branch, all departments
outperformed their targets.
Financing of banks and governments forms an important pillar of the Hong Kong operations,
which in 2000 benefited from a somewhat relaxed risk situation and robust economic growth.
At the branch in New York, corporate finance (investment in securitised senior loans) accounted
for almost three fourths of the total lending volume and hence remained the mainstay of activities.
In 2000, this branch expanded its lending volume from EUR 1.8 billion (USD 1.96 billion) to
EUR 2.03 billion (USD 2.2 billion).
On the whole, the International Business unit with its four profit centres markedly improved
its performance across all products and services.
Erste Bank 2000 47